Mortgage Rate Projections – October 30, 2023

This week’s featured data presents early figures for both manufacturing and services PMI (Purchasing Managers Index). These indices function as leading indicators for the economy, offering valuable insights into the current state of the service industry’s cost of living. While manufacturing displayed an anticipated upswing towards the end of October, services experienced a contraction, dropping from 49.3 to 46.6. Readings below the 50.0 mark can signal an economic downturn, especially given the time of year.

Moving on to Mortgage Applications & Rates Indices:

  • The MBA Mortgage Applications Index recorded a 1.0% decrease in applications for the week, coupled with yet another week-over-week rise in rates.

In the Primary Mortgage Market Survey Index:

  • 15-Year Fixed-Rate Mortgage (FRM) rates saw a week-to-week increase of 0.11%, with the current rate at 3%.
  • 30-Year FRM rates witnessed a week-to-week increase of 0.16%, currently standing at 3.79%.

In the MND Rate Index:

  • 30-Year FHA rates displayed a weekly decrease of -0.08%, bringing the current rates to 3.2%.
  • 30-Year VA rates also decreased by -0.11% for the week, with the current rates at 3.3%.

Shifting to Personal Income & Spending:

  • Personal income saw an increase of $77.8 billion (0.3% monthly rate) in September, while disposable personal income (DPI) grew by $56.1 billion (0.3%), and personal consumption expenditures (PCE) increased by $138.7 billion (0.7%).
  • The PCE price index rose by 0.4%, and when excluding food and energy, the PCE price index increased by 0.3%.

A crucial point to note is that personal income rose in September, leading to increased spending as we entered October, offering strong signals for the Advanced GDP numbers in the remaining part of the year.

Regarding Job Claims:

  • The number of individuals applying for unemployment benefits last week declined to a nine-month low of 188,000, defying expectations that layoffs would surge amidst rising U.S. interest rates.
  • Initial Claims stood at 210,000, aligning closely with the expected claims of 210,000, compared to the prior week’s figure of 211,000.

Looking ahead, this week’s scheduled economic reports include ISM manufacturing data, S&P U.S. Manufacturing PMI, and Job Openings. The more substantial data points for U.S. non-farm payrolls are anticipated to emerge towards the week’s end on Friday.

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